County ‘turning into a Vail or Breckenridge’

Jason Ferguson

The Custer County Commission knows property assessments and taxes are rising at an unsustainable level. Custer County Department of Equalization director Leah Vissia knows that, as well. The around 60 people who packed the Custer County Commission meeting room, with some spilling out into the hallway, at the March 9 meeting of the commissioner definitely know that’s the case.
What they don’t know, however, is what can be done about it. However, if the concern and enthusiasm displayed at the meeting transforms into action, something will at least be attempted to fix it in the coming year.
It was standing room only at the commission’s March 9 meeting, as county property owners flooded the commission room to express their concern, and in some cases, outright disgust, at the skyrocketing property values in the county. More than one person expressed concerns that if things continue on their current course, with property values sometimes doubling in a single year, they won’t be able to afford their homes anymore and will be forced to sell their property due to the escalating property taxes.
“I don’t know much about this, I just know we are going to end up moving because we can’t afford our taxes come next year,” said a woman in the crowd who said she drove a school bus for a living. “Where I live on Jewel Road people have come out and built these huge, immaculate homes. I live in a trailer.”
Another woman questioned if it was possible to stop the influx of people into the area, saying they were going to turn Custer County into “a Vail, Breckridge or Aspen Colo., or Jackson Hole, Wyo,” adding that although people who move here from urban areas claim they leave their urban ideals behind, people from large population centers do not think the same way as someone who grew up in Custer County.
“This is crazy. They will price us out of our homes,” she said.
Yet another man in the audience said he was on Social Security and would likely have to choose between buying groceries and heating his home due to the cost of property taxes.
The woman on Jewel Road was referring to what are known as “comparables” homes in a neighborhood that are sold, or in this case constructed, and the value they have placed upon them. Those sales are used to form a ratio, and the middle of those ratios, the median, is used to figure the level of assessment in any one neighborhood. So if sales of homes start bringing in giant sums of money, that in turn raises the property values of all the homes in that area. By law, the county must assess property at 100 percent of what is known as “full and true,” the market value of the home. If the county does not do that, the state comes in and gives a factor that it multiplies the assessed value times to make sure the property is being taxed at the appropriate level. Every time a bidding war breaks out on a home or land in the county and more money is paid that for what it is assessed, it drives the values up and drives the percentage of what county property is being taxed at down. As a result, the county Department of Equalization must raise property values, and in some cases, quite dramatically. Such was the case with land in the county this assessment year.
“Our land value was our problem,” Department of Equalization director Leah Vissia said. “That’s why it tremendously increased. We were at 30 to 40 percent of the market on land. Our land had to increase.”
Even with dramatic increases, county property overall is still only assessed at 82.17 percent of market value, meaning the state will still tack a factor on for tax purposes.
Another factor in the upward march of taxes is the supply and demand factor. More and more people are moving to Custer County and the Black Hills in general, leaving behind larger cities or looking to make Custer County their retirement home. The county is only so big, however, and Vissia asked those in attendance to look at a map on the wall that dramatically displayed just how little private land there is in the county. With Custer State Park, Jewel Cave National Monument, Wind Cave National Park, the U.S. Forest Service land at the Buffalo Gap National Grasslands available land is finite, and all of the government entities don’t pay any property tax, forcing those who do pay taxes to shoulder even more of a burden, particularly those who are owner-occupied status, as agricultural land is taxed at a much cheaper rate than non-ag land.
“I want you to be aware of why taxes are so expensive,” Vissia said. “We have very little people paying taxes that need to be collected.”
The state does provide some money to the county for things such as law enforcement, roads, etc., in Custer State Park, but it’s not near what the park would pay if it were to be taxed for its value. State parks are protected from property taxes through the state constitution, and commission chairman Jim Lintz said his father, Jack, once attempted make it so the park can be taxed when he was on the county commission, but it went nowhere.
Warren Graham said he wasn’t so concerned about the rising assessments as he was inequity of taxing in the county, pointing out Regency, the concessionaire in Custer State Park, makes millions of dollars off the park but doesn’t pay taxes to the county or school district.
“I think we need to look at that inequality to make sure everybody is paying into this system, not just a few people,” he said.
Graham added most of the people in the room likely contributed to rising assessments when they moved to Custer County, likening owning property in Custer County to winning the lottery.
“Our property is worth a lot more today than it was a year ago,” he said. “It’s a two-edge sword, but I hope we look at the taxes, how they are collected and who is paying them.”
Former campground owner Max Hammer also touched on Custer State Park, saying while tax dollars subsidize the park, he feels it should be the other way around.
“You folks have to make that pig squeal. These folks can’t do anything about it,” he said, referring to the commissioners. “You’ve got to write the governor and legislators,” he said, saying legislators across the state, not just in District 30. “Force Custer State Park to step up to the plate and pay, as well as all the other state parks out there.”
Realtor Jim Peterson of Hill City said rising assessments don’t automatically mean higher taxes, saying it’s up to the commission to keep its budget down, which will in turn keep its mill levy down and taxes won’t have to be increased to accommodate a rising budget. It was pointed out the commission has consistently kept its budget flat or on a slight increase, and that it can’t dramatically lower its mill levy because by law it is much more difficult to increase the levy than it is to lower it, meaning if the county got into a budget crunch it could find itself in trouble if the mill had been lowered too much.
“I believe we are doing a pretty frugal job,” commissioner Craig Hindle said.
It was also pointed out that of the $19 million in property tax collected in Custer County in 2021, the county only received just under $4 million of that, while the school district received $11 million. The commission has previously railed against the state’s funding formula for education, as the county brings in so much money it doesn’t receive any state aid and likely subsidizes other, less well-off districts in the county.
“We have known this is a problem. We can’t change it at a local level,” Lintz said, saying the same thing was happening with agricultural land and he fought for 10 years as a state legislator to enact change to the way that land was taxed, eventually succeeding. “We’re going to run into the same thing when we fight in Pierre to change the system. Not everyone is having the problem we are in the Black Hills. I wish we had an easy solution. There isn’t any easy solution.”
There was legislation introduced during this session, HB 1330, that would have limited the increase of assessed value of property for the purposes of taxation, thereby limiting the value of property taxes paid, but it was gutted and amended before eventually being sent to the 41st day, essentially killing the legislation. That legislation is similar to California’s Prop 13, which rolled back assessments for two years and then allowed it to only be increased 2 percent per year, until the property sells. The new property owner then pays taxes based upon what the home sells for and does so knowingly.
Graham warned that California found a way to get around Prop 13, however, saying the state raised fees for virtually everything to compensate.
“Huge gas taxes, licensing fees—everything has a fee to it,” he said. “Be cautious.”
Lea Anne McWhorter, who served on a committee to look into possible property tax solutions but was unable to come up with anything viable at a local level (the committee plans to resume its work) said any change is going to have to be initiated through a grassroots campaign that is taken to Pierre, a movement she said would need to be along the lines of the movement to get the idea of another campground in Custer State Park killed.
“District 30 Rep. Tim Goodwin had 1,500 emails saying ‘we don’t want to do this,’” McWhorter said of the movement against the campground plans. “So did (District 30 Sen.) Julie (Frye-Mueller). So did (District 30 Rep.) Trish (Ladner). There was a barrage and that bill didn’t happen.”
“If this group doesn’t do anything, we are going to sit here five years from now and we’re going to be complaining about the same thing,” commissioner Mark Hartman told the people in the audience. “We have to get a change. We can’t just sit here and talk about it for another five to 10 years. We have to get the laws changed.”
“We can’t ignore this any longer,” another voice from the crowd said.


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